Classic account

Funding Circle has been the most lucrative [peer-to-peer platform]. Since I joined in August 2012, drip feeding cash in, my returns, after all fees and bad debt adjustment, have been 6.2pc.

Martin Lewis, writing in The Daily Telegraph, 2013

Choose your lending option

To help you get the return you’re looking for, you can choose between two lending options. They are available for both our Classic and ISA accounts, and you can switch options at any time by logging in online.

Balanced

6 - 7% 1

Projected return

You lend to the full range of creditworthy businesses to build a balanced portfolio

This option has a higher projected return, with a higher estimated bad debt rate

Conservative

5 - 5.5% 1

Projected return

You only lend to creditworthy businesses that have been assessed as lower risk

This option has a lower projected return, with a lower estimated bad debt rate

The rates shown are the annual projected returns, after fees and bad debts but before tax, that a diversified investor could earn with either lending option. Your actual return may be higher or lower than projected, for example due to the performance of the individual loans your funds are matched with, or a change in macroeconomic conditions. By lending to businesses your capital is at risk. See the full calculation here.

The tax-free entitlement of an ISA depends on the individual circumstances of each investor, and may be subject to change in the future.

Interest earned is after fees and bad debt, but before tax.

Simple to use at every step

With an easy-to-use online account, automatic tools and fantastic investor support, earning attractive and stable returns is quick and simple.

Open your online account

Set up your account in minutes and transfer money from your debit card.

Start lending automatically

Our automatic lending tool allows you to lend small amounts to hundreds of different businesses.

Accessing your funds

Your funds will be lent to businesses who borrow over 6 months to 5 years, but you have options to access your money at any stage. When you’re ready you have two options:

Withdraw as you go

Turn off reinvesting and withdraw your repayments as they come in.

Withdraw a lump sum

Select the amount you’d like to withdraw, and sell your active loans to other investors using our automatic selling tool.

There are no fees for selling loans. While usually very fast, selling loans is not instant and depends on demand from other investors looking to buy at that time. You can only sell active loans with no credit issues, and not in the last month of their term.

Funding Circle, the largest peer-to-peer company in the UK, has received authorisation from the Financial Conduct Authority

The Financial Times, May 2017

How we manage risk

Only established businesses who have passed our rigorous credit assessment process can borrow through Funding Circle.

However, it’s important to remember that some businesses will not be able to fully repay their loan. We call this a bad debt, and it’s already accounted for in your projected return.

We reduce the impact of bad debt in 3 key ways:

Rigorous assessment with advanced technology

Our vastly experienced credit assessment team combine decades of experience from some of the world’s leading financial institutions. They use thousands of data points, innovative technology and their detailed understanding of business lending to assess every application, so only creditworthy businesses are approved.

Diversification and minimum investment

Diversification, where you spread your lending across many businesses, is the best way to earn a stable return. To help you build a well diversified portfolio, we suggest lending £2,000 or more, as this allows you to:

Lend to at least 200 businesses

Lend no more than 0.5% of your total to each one

93% of investors who have diversified like this for a year or more have earned 4% or more. If you’d like to start with less, the minimum initial transfer is £1,000. Correct as of 30th September 2018.

We collect debts for you

When a business is unable to fully repay their loan, we handle everything for you. Our collections and recoveries team work to recover as much as possible for you, and have won awards in their field for the outstanding recoveries they make for investors.

What could happen to returns in an economic downturn?

We regularly perform stress tests to simulate what could happen to investor returns during difficult periods, for example during an economic downturn.

The below chart shows what could happen to projected returns if the bad debt rate were to double, as estimated in a stressed scenario modelled by the Bank of England. In this scenario we estimate that returns would remain resilient.

Interest earned can cover a significant increase in bad debt

It’s important to note that modelling for future economic events is always an estimate, and as you are lending to your own individual portfolio your returns may be higher or lower. Past performance is not a guarantee of future returns.

The projected returns shown are for loans made in 2017, and are an average across the lifetime of the loans, so may vary from year to year.

Help British businesses thrive

You’ll lend to hundreds of established, creditworthy businesses in different sectors and regions throughout the UK. Whether they need new premises, a better website or an extra pair of hands, your lending will help them grow, create jobs and drive the economy forward.